Lesson Plan — Unit Two Goods and Services
Course Title: Principles of Business, Marketing, and Finance
Session Title: Lesson Eleven -Wholesalers in a Private Enterprise System
Performance Objective:
• Upon completion of this lesson, the student will explain the role of wholesalers in
a private enterprise system.
Specific Objectives:
• Describe the benefits that wholesalers provide to other members of a channel of
distribution and to final consumers.
• Explain how the role of wholesalers is changing in an economy where many of
their traditional retail customers prefer to deal directly with manufacturers.
• Explain the role of rack jobbers.
• Explain the role of drop shippers.
• Explain how mass merchandisers use specialized wholesalers to manage certain
product lines they carry like health and beauty aids.
Preparation
TEKS Correlations:
This lesson, as published, correlates to the following TEKS. Any changes/alterations to
the activities may result in the elimination of any or all of the TEKS listed.
• 130.112(c)(6)(F)
identify examples of wholesalers
• 130.112(c)(3)(C)
summarize the characteristics of the private enterprise system
• 130.112(c)(6)(G)
describe the role of wholesalers in a private enterprise system
Interdisciplinary Correlations:
English
110.42(b)(6)(A) – Vocabulary Development
…expand vocabulary through wide reading, listening, and discussing
110.42(b)(6)(B) – Vocabulary Development
… rely on context to determine meanings of words and phrases such as figurative
language, idioms, multiple meaning words, and technical vocabulary
110.42(b)(7)(F) – Reading/comprehension
…identify main ideas and their supporting details
110.42(b)(7)(G) – Reading/comprehension
…summarize texts
110.42(b)(7)(J) – Reading/comprehension
…read silently with comprehension for a sustained period of time
Interdisciplinary Correlations:
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1
Mathematical Models with Applications
111.36(c)(1)(A) – Knowledge and Skills
…compare and analyze various methods for solving a real-life problem.
111.36(c)(1)(B) – Knowledge and Skills
…use multiple approaches (algebraic, graphical, and geometric methods) to solve
problems from a variety of disciplines
111.36(c)(1)(C) – Knowledge and Skills
…select a method to solve a problem, defend the method, and justify the
reasonableness of the results
111.36(c)(6)(A) – Knowledge and Skills
…analyze methods of payment available in retail purchases and compare relative
advantages and disadvantages of each option.
111.36(c)(7)(A) – Knowledge and Skills
…analyze types of savings options involving simple and compound interest and
compare relative advantages of these options.
Accommodations for Learning Differences:
It is important that lessons accommodate the needs of every learner. These lessons
may be modified to accommodate your students with learning differences by referring to
the files found on the Special Populations page of this website.
References:
1. Intro to Business, Dlabay Burrow Klendl, South-Western Cengage Learning
2. Introduction to Business, Brown Clow, Glencoe McGraw-Hill
3. Marketing, Burrow, South-Western Cengage Learning
4. Online Resources: globaledge.msu.edu, worldnetdaily.com/news/article
Instructional Aids:
1. “Wholesalers in a Private Enterprise System” PowerPoint Presentation
2. Wholesale Franchise/Cooperative Research Assignment #1
3. Wholesale Franchise/Cooperative Research Assignment #1 Rubric
4. Develop a Sales Presentation Assignment #2
5. Develop a Sales Presentation Assignment #2 Rubric
6. Design a Display for a Wholesaler Assignment #3
7. Design a Display for a Wholesaler Assignment#3 Rubric
8. FUN FACTS DISPLAYED Assignment
9. FUN FACTS Assignment Rubric
10. Internet
Copyright © Texas Education Agency, 2011. All rights reserved.
2
Materials Needed:
1. Construction paper
2. Scissors and glue
3. Poster board
4. Newspapers
Equipment Needed:
1. Computers for students to complete projects
2. Projector for PPT
Learner Preparation:
1. Use the Internet to research wholesaler. Write several paragraphs about
wholesalers and their purpose in a market economy.
2. Give students major brands of automobiles, computers, and other appliances
then ask students to research where the items are manufactured. Then ask
students to determine if wholesalers are used to get the items from the
manufacturers to retailers. Who are the wholesalers involved in the transaction?
3. Visit a local restaurant owner/manager. Ask them which wholesalers they use for
their operation. Then ask them the advantages and disadvantages of using a
wholesaler. How have wholesalers made their operation more efficient?
Lesson Plan
Introduction (LSI Quadrant I):
1. Ask students to write their definition for “wholesaler.” Then show a picture of
three people in a row with the middle person highlighted. Explain how a
wholesaler is a middleman.
2. Ask students to recall the last time that they visited a supermarket. Describe a
display for soda, potato chips, etc. Explain how the display was set up by a
wholesaler and how large supermarkets and other stores count on wholesalers
for promotional details.
Important Terms for this Lesson:
• wholesaler – distributor that moves goods from one business to another business
• wholesale member clubs – businesses that offer a variety of consumer products
to members through a warehouse outlet
• channel members-the businesses that take part in a channel of distribution
• rack jobbers-wholesalers that manage inventory and merchandising for retailers
by counting stock, filling it in when needed and maintaining store displays
• drop shippers-own the goods they sell but do not physically handle the actual
products (drop shippers sell the goods to other businesses and have the
producer ship the merchandise directly to the buyer
Copyright © Texas Education Agency, 2011. All rights reserved.
3
Outline
Outline (LSI Quadrant II):
Instructors can use the PowerPoint presentation, slides, handouts, current events, the
Internet, and note pages in conjunction with the following outline.
MI
.
Outline
I. The Need for Wholesaling
A. To Manage the Middle
1. numerous retailers
2. producers use wholesalers to reach all of
the consumers in its target market
3. easier for a retailer to work with a
wholesaler than numerous producers
B. Benefits of Wholesaling
1. wholesalers provide important marketing
services for the channels in which they
participate
2. wholesalers may provide one or more of
the needed marketing activities better or
at a lower cost
3. the wholesaler combines the orders of
several small retailers and purchases in
efficient quantities
4. manufacturers my not have adequate
facilities to store the products until they
can be sold to retailers
5. wholesalers specialize in storage and
inventory management
C. Wholesaling Activities
1. buying
2. selling
3. transporting
4. storing
5. financing
6. accumulating products of many
manufacturers, developing appropriate
assortments for their customers, and
distributing the products to their
customers
7. assisting manufacturers in determining
needs of retailers and final consumers
and providing market information to
retailers
8. collecting and analyzing information on
sales, costs, changes in demand, and
Copyright © Texas Education Agency, 2011. All rights reserved.
Notes to Instructor
Wholesalers provide
merchandise to
retailers in an
efficient manner.
Since wholesalers
deal with larger
quantities, prices for
merchandise are
reduced.
Some wholesalers
provide displays,
promotions, and
other conveniences
to retailers.
Wholesalers are
aware of the latest
merchandising
trends and help
retailers stay on top
of the most popular
items for consumers.
4
inventory levels
9. purchasing products from producers and
manufacturers and selling them to their
customers
10. assuming risk by investing money in
products that may be damaged or
destroyed
D. Types of Wholesalers
1. full-service wholesalers
a. take title to the products they sell
b. provide a full range of distribution
activities
c. provide or arrange transportation
services
d. offer credit
e. provide promotion assistance, product
research, information, product
installation and repair
2. limited-service wholesalers
a. may not provide services such as
research, credit, or promotional
support
b. concentrate on one or two important
functions such as warehousing and
storage, product delivery, or
accumulating products for sale in a
convenient location
3. agents and brokers
a. independent businesses
b. provide specialized exchange
functions such as locating suppliers,
selling, financing, or arranging
shipments
c. do not take title to products
d. work as an extension of the workforce
of the manufacturer or retailer
E. Other Wholesaling Businesses
1. wholesale franchises and cooperativesgroups of small businesses that affiliate
because of the benefit gained from
cooperation in completing marketing and
distribution activities
a. IGA, FTD, Ace Hardware – examples
b. members gain benefits from
purchasing larger quantities
2. Wholesale member clubs-businesses
Copyright © Texas Education Agency, 2011. All rights reserved.
Many wholesalers
extend credit to
retailers. They also
have insurance to
cover any possible
damages to
merchandise.
Limited-service
wholesalers may act
as a storage facility
until the retailer
needs the
merchandise. A
convenient location
may allow the
wholesaler to make
efficient deliveries
when merchandise is
needed by the
retailer.
Some independent
agents are hired by
retailers to locate
merchandise and
provide smaller
quantities when
needed by retailers.
Agents and brokers
may work as
representatives for
manufacturers.
When businesses
form together as
cooperatives, they
5
that offer a variety of consumer products
to members through a warehouse outlet
a. open to final consumers and
businesses
b. Sam’s Club and Costco
c. products displayed in large
warehouses
d. limited product assortments are
available in large quantities
e. customers must transport their
purchased products
F. Changing Role of Wholesalers
1. large retailer may prefer working directly
with producers
2. more small- and medium-sized retailers
and manufacturers than there are large
businesses
3. access to markets
a. product awareness
b. export and import organizationimportant in building international
business
c. better communications and information,
improved technology, broader customer
service
d. work to identify their customers and
understand their needs
e. learn of the problems the customers are
having with products and marketing
activities and help them to solve those
problems
G. Specialized services
1. marketing research and marketing
information services
2. provide customers with important data
3. computer technology to process orders
quickly
4. new methods for storing and handling
products to reduce product damage, the
cost of distribution, and the time needed
to get products from the manufacturer to
the customers
5. adding customer services-marketing and
promotional planning, 24-hour ordering
and emergency deliveries, specialized
storage facilities, and individualized
Copyright © Texas Education Agency, 2011. All rights reserved.
have the advantages
of buying power,
promotion,
distribution, and
advertising.
Sam’s Club and
Costco are examples
of clubs
(organizations) that
provide members
with the benefit of
lower prices.
Some large
businesses prefer to
work directly with
manufacturers.
Cutting out the
middle man saves
companies money.
Wholesalers are
increasing the
services they offer to
retailers. One of the
biggest benefits
offered by
wholesalers is
research and
marketing
information services.
Emergency ordering
and delivery are
important benefits
provided by today’s
wholesalers.
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branding and packaging services
Copy and paste Multiple Intelligences Graphic in appropriate place in left column.
Verbal
Linguistic
Logical
Mathematical
Visual
Spatial
Musical
Rhythmic
Bodily
Kinesthetic
Intrapersonal
InterPersonal
Naturalist
Existentialist
Application
Guided Practice (LSI Quadrant III): Give students a list that contains the categories of
retail stores in sections C, D, and E. Then give students five minutes to write the name
of a store for each category. This activity is a good ice breaker for the lesson about
retailers.
Independent Practice (LSI Quadrant III):
1. Wholesale Franchise/Cooperative Research Assignment: Ask students to
identify and conduct research on one wholesale franchise or cooperative. Then
students must prepare a report that identifies when and how the
franchise/cooperative was started, the reasons it was formed, how it has
expanded and changed over the years, and future plans for the organization. A
picture of the company’s logo should be included in the report.
2. Develop a Sales Presentation Assignment: Tell students that they are sales
representatives for a full-service merchant wholesaler. They are contacting a new
restaurant owner who does not currently use a wholesaler. The owner purchases
fresh foods from local growers and buys most other products and supplies from a
local wholesale member club or online from other businesses. Prepare a threeminute sales presentation on the benefits to the owner when using your
wholesale business for all purchases rather than the current practice.
3. Design a Display for a Wholesaler Assignment: Ask students to play the role
Copyright © Texas Education Agency, 2011. All rights reserved.
7
of a wholesaler and design an in-store display for a soft drink, potato chips, or
other type of snack food for the Super Bowl. Students will show their display in a
class presentation. Students may also use a PowerPoint to describe the display
provided by the wholesaler.
Summary
Review (LSI Quadrants I and IV):
Q: What is a rack jobber?
A: A rack jobber maintains the inventory for a store.
Q: Do wholesalers work with final consumers in any significant way?
A: They do not work with final consumers in any significant way; their role is to provide
needed marketing functions between producers and businesses.
Q: How is a full-service wholesaler different from a limited-service wholesaler?
A: The full-service wholesaler takes title to the products they sell and provide a full rang
of distribution activities. The limited-service (specialized) wholesalers may not
provide services such as research, credit, or promotional support; they concentrate
on one or two important functions such as warehousing and storage, product
delivery, or accumulating products for sale in a convenient location such as a
produce or fresh fish market for supermarkets.
Q: What are wholesale member clubs?
A: Wholesale member clubs are businesses that offer a variety of consumer products
to members through a warehouse outlet.
Q: What types of benefits does a wholesaler provide to other members of a distribution
channel?
A: Wholesalers are companies that assist with distribution activities between
businesses. They provide marketing services and typical wholesaling activities
include buying, selling, transporting, storing, and financing. They accumulate the
products of many manufacturers, develop appropriate assortments for their
customers, and distribute the products to them.
Q: What happens to the costs of distribution activities when a wholesaler is used to
complete them?
A: The costs of the activities are lower when a wholesaler is used.
Q: Why have the number of wholesalers not decreased due to consolidation of
businesses?
A: Wholesalers are still highly demanded by small- and medium-sized businesses.
There are more small- and medium-sized businesses and manufacturers than large
operations.
FUN FACTS DISPLAYED
According to the 2002 U.S. Economic Census report, 435,521 U.S. wholesalers
generated sales of more than $4.6 trillion dollars. At the same time, 1.1 million retail
businesses reported total U.S. sales of just under $3.1 trillion. Wholesalers
generated one-fifth of their total sales in foreign markets. Ask students to display this
information in a visual format that is easy to comprehend.
Evaluation
Informal Assessment (LSI Quadrant III):
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8
1. Instructor will observe students during Independent Practice.
2. Instructor will assist students as needed.
Formal Assessment (LSI Quadrant III, IV):
Assigned Rubrics will be used to assess assignments 1, 2, and 3 for Independent
Practice (LSI Quadrant III).
Extension/Enrichment (LSI Quadrant IV):
1. Ask students to conduct research to determine a major wholesaler for a store
where you frequently shop. Then design a one-page advertisement that tells
producers what services are offered by the wholesaler.
2. Ask students to visit Costco or Sam’s Club or research the companies online.
Then ask students to outline the mission of the store, merchandise selection,
prices, and procedure for consumer membership.
3. Farmers frequently form wholesale cooperatives to jointly brand and market their
products. Conduct research to learn more about farm cooperatives such as
Sunkist and Land-O-Lakes. Write a one-page paper about the cooperative, its
membership, and its functions.
Copyright © Texas Education Agency, 2011. All rights reserved.
9
Wholesalers in a Private Enterprise System
Independent Practice Assignment Sheet
Wholesale Franchise/Cooperative Research Assignment #1: Identify and conduct
research on one wholesale franchise or cooperative. Then prepare a report that
identifies when and how the franchise/cooperative was started, the reasons it
was formed, how it has expanded and changed over the years, and future plans
for the organization. A picture of the company’s logo should be included in the
report.
Develop a Sales Presentation Assignment #2: You are a sales representative for a
full-service merchant wholesaler. You are contacting a new restaurant owner
who does not currently use a wholesaler. The owner purchases fresh foods from
local growers and buys most other products and supplies from a local wholesale
member club or online from other businesses. Prepare a three-minute sales
presentation on the benefits to the owner when using your wholesale business
for all purchases rather than the current practice.
Design a Display for a Wholesaler Assignment #3: Play the role of a wholesaler and
design an in-store display for a soft drink, potato chips, or other type of snack
food for the Super Bowl. You will show their display in a class presentation. You
may also use a PowerPoint to describe the display provided by the wholesaler.
FUN FACTS DISPLAYED
According to the 2002 U.S. Economic Census report, 435,521 U.S. wholesalers
generated sales of more than $4.6 trillion dollars. At the same time, 1.1 million
retail businesses reported total U.S. sales of just under $3.1 trillion. Wholesalers
generated one-fifth of their total sales in foreign markets. Display this information
in a visual format that is easy to comprehend.
Copyright © Texas Education Agency, 2011. All rights reserved.
10
Wholesalers in a Private Enterprise System
Wholesale Franchise/Cooperative Research Assignment #1 Rubric
Student Name:
_____________________________________________________
20
15
10
5 or less
Organization
Information is very
organized with wellconstructed
paragraphs and
subheadings.
Information is
organized with wellconstructed
paragraphs.
Information is
organized, but
paragraphs are not
well-constructed.
The information
appears to be
disorganized. 8)
Quality of
Information
Information clearly
relates to the main
topic. It includes
several supporting
details and/or
examples.
Information clearly
relates to the main
topic. It provides 1-2
supporting details
and/or examples.
Information clearly
Information has little
relates to the main
or nothing to do with
topic. No details
the main topic.
and/or examples are
given.
Amount of
Information
All topics are
addressed and all
questions answered
with at least 2
sentences about
each.
All topics are
addressed and most
questions answered
with at least 2
sentences about
each.
All topics are
One or more topics
addressed, and most were not addressed.
questions answered
with 1 sentence
about each.
Sources
All sources
(information and
graphics) are
accurately
documented in the
desired format.
All sources
(information and
graphics) are
accurately
documented, but a
few are not in the
desired format.
All sources
(information and
graphics) are
accurately
documented, but
many are not in the
desired format.
Some sources are
not accurately
documented.
Diagrams &
Illustrations
Diagrams and
illustrations are neat,
accurate and add to
the reader's
understanding of the
topic.
Diagrams and
illustrations are
accurate and add to
the reader's
understanding of the
topic.
Diagrams and
illustrations are neat
and accurate and
sometimes add to
the reader's
understanding of the
topic.
Diagrams and
illustrations are not
accurate OR do not
add to the reader's
understanding of the
topic.
CATEGORY
Total Score _______
Maximum 100 Points
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11
Wholesalers in a Private Enterprise System
Develop a Sales Presentation Assignment#2 Rubric
Student Name:
_____________________________________________________
20
15
10
5 or less
Comprehension
Student is able to
accurately answer
almost all questions
posed by classmates
about the topic.
Student is able to
accurately answer
most questions
posed by classmates
about the topic.
Student is able to
accurately answer a
few questions posed
by classmates about
the topic.
Student is unable to
accurately answer
questions posed by
classmates about
the topic.
Preparedness
Student is
completely prepared
and has obviously
rehearsed.
Student seems
pretty prepared but
might have needed a
couple more
rehearsals.
The student is
Student does not
somewhat prepared, seem at all prepared
but it is clear that
to present.
rehearsal was
lacking.
Enthusiasm
Facial expressions
and body language
generate a strong
interest and
enthusiasm about
the topic in others.
Facial expressions
and body language
sometimes generate
a strong interest and
enthusiasm about
the topic in others.
Facial expressions
and body language
are used to try to
generate
enthusiasm, but
seem somewhat
faked.
Very little use of
facial expressions or
body language. Did
not generate much
interest in topic
being presented.
Speaks Clearly
Speaks clearly and
distinctly all (10095%) the time, and
mispronounces no
words.
Speaks clearly and
distinctly all (10095%) the time, but
mispronounces one
word.
Speaks clearly and
distinctly most ( 9485%) of the time.
Mispronounces no
more than one word.
Often mumbles or
can not be
understood OR
mispronounces more
than one word.
Posture and Eye Stands up straight,
looks relaxed and
Contact
Stands up straight
and establishes eye
contact with
everyone in the
room during the
presentation.
Sometimes stands
up straight and
establishes eye
contact.
Slouches and/or
does not look at
people during the
presentation
CATEGORY
confident.
Establishes eye
contact with
everyone in the
room during the
presentation.
Total Score _______
Maximum 100 Points
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12
Wholesalers in a Private Enterprise System
Design a Display for a Wholesaler Assignment #3 Rubric
Student Name:
_____________________________________________________
20
15
10
Planning/organization
Student can describe
the intent and plan of
complete display and
how his/her part will
contribute to the whole.
Works with team to
come up with general
plan of what will be
done before beginning.
Student has carefully
planned his/her part of
the display and can
describe how s/he will
get the work done and
a vision for his/her part.
Gets team input on
plan for his/her
contribution before
beginning.
Student has planned
Leaps into action
his/her part of the
without any evidence of
display and can
planning or focus.
describe how s/he will
get the work done and
a vision for his/her part.
Does not solicit much
group input when
making plan.
Balance and Use of
Space
Use of positive and
negative space creates
a feeling appropriate to
the theme. Objects are
placed for best effect.
Overall, it just feels
right.
Use of positive space
is good and the
painting is relatively
balanced, but negative
space could be utilized
better to create a more
cohesive feel.
The display seems to
have a little too much
background or seems a
little too busy. Balance
has not been achieved.
Color Use
The colors in the
display work well
together and form a
strong coherent
statement. The color
choice is appropriate for
the theme and objects
represented or is
purposely exaggerated
in some way to make a
point.
The use of color is
coordinated across the
display and is
appropriate for the
items and theme.
The overall use of color Color choice for various
is ok, but is not as
items in the display
strong or coordinated
seems inappropriate.
as it could be. Some
attempt at coordinating
colors is evident.
Craftsmanship
The display has been
crafted with great care.
The lines are sharp,
colors clear, cutting
crisp, and text aligned.
No smudges, drips,
tears or erasures are
seen.
The display has been
crafted with some care.
Most lines are sharp,
colors clear, cutting
crisp, and text aligned.
Smudges, drips, tears
or erasures are few
and do not detract.
The display has been
completed, but it
appears a little messy.
Smudges, drips, tears
or erasures detract
from the overall
appearance.
The display looks
hastily thrown together
or like it was wadded
up in a desk. The mural
seems quite messy.
Time and Effort
Class time was used
wisely. Much time and
effort went into the
planning and creation of
the display. It is clear
the students worked at
home as well as at
school.
Class time was used
wisely, but it did not
appear there was
much work done
outside of class.
Class time was not
always used wisely, but
additional work was
done at home or other
times during the day.
Class time was not
used wisely and no
additional effort was put
in at other times or
places
CATEGORY
5 or less
The display seems
unfinished (too much
empty space) or there
is not enough balance
between foreground
and background
causing it to seem
much too busy and
unfocused.
Total Score _______
Maximum 100 Points
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13
Wholesalers in a Private Enterprise System
FUN FACTS DISPLAYED Rubric
Student Name:
_____________________________________________________
20
15
Neatness and
Attractiveness
Exceptionally well
designed, neat, and
attractive. Colors
that go well together
are used to make
the graph more
readable. A ruler and
graph paper (or
graphing computer
program) are used.
Neat and relatively
Lines are neatly
attractive. A ruler
drawn but the graph
and graph paper (or appears quite plain.
graphing computer
program) are used to
make the graph
more readable.
Appears messy and
"thrown together" in
a hurry. Lines are
visibly crooked.
Type of Graph
Chosen
Graph fits the data
well and makes it
easy to interpret.
Graph is adequate
and does not distort
the data, but
interpretation of the
data is somewhat
difficult.
Graph distorts the
data somewhat and
interpretation of the
data is somewhat
difficult.
Graph seriously
distorts the data
making interpretation
almost impossible.
Accuracy of
Information
Information
displayed very
accurately.
Information is within
a few percentage
points of accuracy.
Some information is Information
accurate while other displayed in a
information is
confusing manner.
confusing.
Presentation
Neat vivid
presentation.
Colorful presentation Colorful presentation Confusing
that stays on target that does not
presentation.
90% of the time.
highlight all
necessary details.
Overall Effort
Extra effort was
evident.
Basic amount of
effort used.
CATEGORY
10
Effort seemed to be
lacking.
5 or less
Project seemed to
be a last-minute
effort
Total Score _______
Maximum 100 Points
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14